UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

(Mark One)

|X|   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
                                         FOR THE FISCAL YEAR ENDED JUNE 30, 2005

|_|   TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934
                         FOR THE TRANSITION PERIOD FROM __________ TO __________
                         COMMISSION FILE NUMBER ________________________________

                                    DIGICORP
                 (Name of small business issuer in its charter)

             Utah                                        87-0398271
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


   100 Wilshire Boulevard, Suite 1750
            Santa Monica, CA                                90401
            -----------------                               -----
(Address of principal executive offices)                 (Zip Code)

                    Issuer's telephone Number: (801) 566-3000

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: Common Stock,
$.001 par value


      Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes |X| No
|_|

      Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |_|

      Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes |X| No |_|

      State issuer's revenues for its most recent fiscal year. $0

      The aggregate market value of the voting and non-voting common equity held
by non-affiliates, computed by reference to the average bid and asked price of
such common equity as of September 21, 2005, was $7,974,404.

      As of September 21, 2005, the issuer had 14,184,033 outstanding shares of
Common Stock.

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE

      Transitional Small Business Disclosure Format (check one): Yes |_| No |X|

<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

                                                                                                      Page
                                                                                                      ----
                                     PART I
<S>        <C>                                                                                         <C>
Item 1.    Description of Business...................................................................   1
Item 2.    Description of Property...................................................................   6
Item 3.    Legal Proceedings.........................................................................   6
Item 4.    Submission of Matters to a Vote of Security Holders.......................................   6

                                     PART II

Item 5.    Market for Common Equity and Related Stockholder Matters..................................   6
Item 6.    Management's Discussion and Analysis or Plan of Operation.................................   8
Item 7.    Financial Statements......................................................................  11
Item 8.    Changes In and Disagreements with Accountants on Accounting and Financial Disclosure......  21
Item 8A.   Controls and Procedures...................................................................  21
Item 8B.   Other Information.........................................................................  21

                                    PART III

Item 9.    Directors, Executive Officers, Promoters and Control Persons;
           Compliance With Section 16(a) of the Exchange Act.........................................  21
Item 10.   Executive Compensation....................................................................  24
Item 11.   Security Ownership of Certain Beneficial Owners and Management............................  25
Item 12.   Certain Relationship and Related Transactions.............................................  27
Item 13.   Exhibits..................................................................................  28
Item 14.   Principal Accountant Fees and Services....................................................  29

SIGNATURES...........................................................................................  30
</TABLE>

<PAGE>

                                     PART I

Item 1.    Description of Business.

      Digicorp was  incorporated on July 19, 1983 under the laws of the State of
Utah for the purpose of developing  and marketing  computer  software  programs.
From 1983 to 1995, our sales and  investments  were  attributable to the sale of
computer software and investments related to oil, gas and mining.

      On June 30, 1995, we became a development  stage  enterprise  when we sold
our assets and changed our business  plan.  Since June 30, 1995, we have been in
the developmental  stage and have had no operations other than issuing shares of
common stock for  financing  the  preparation  of financial  statements  and for
preparing  filings for the SEC. In August 2001,  we elected to file a Form 10-SB
registration  statement  with the SEC on a voluntary  basis in order to become a
reporting company under the Securities Exchange Act of 1934.

      Our  business  plan is to  attempt to locate and  negotiate  with  another
company  for the purpose of a business  combination  of the two  companies.  The
combination will normally take the form of a merger, stock-for-stock exchange or
stock-for-assets  exchange. In most instances the company combining with us will
wish to structure  the business  combination  to be within the  definition  of a
tax-free reorganization under Section 351 or Section 368 of the Internal Revenue
Code of 1986, as amended.  No assurances can be given that we will be successful
in locating or negotiating with another company in a business combination.

Significant Recent Event - Acquisition of iCodemedia Assets

      On September 19, 2005, we entered into an asset  purchase  agreement  with
Philip Gatch, our Chief Technology  Officer,  and thereby completed the purchase
of certain assets from Mr. Gatch  consisting of the iCodemedia suite of websites
and internet properties and all related  intellectual  property (the "iCodemedia
Assets").   The   iCodemedia   suite  of  websites   consists  of  the  websites
www.icodemedia.com,   www.iplaylist.com,   www.tunecast.com,  www.tunebucks.com,
www.podpresskit.com  and  www.tunespromo.com.  We plan to use these  websites to
provide a suite of  applications  and  services  to enable  content  creators to
publish and deliver content to existing and next generation  devices such as the
Apple  iPod  and the  Sony  PSP.  The  iCodemedia  Assets  are  presently  under
development and constitute  nominal assets of the Company.  As consideration for
the iCodemedia Assets, we issued Mr. Gatch 1,000,000 shares of our common stock.
The issuance of shares of common stock to Mr. Gatch was exempt from registration
requirements pursuant to Section 4(2) of the Securities Act of 1933, as amended.

Our Business Plan is to Identify and Complete One or More Business Combinations

      Our  business   plan  is  to  research  and   identify   viable   business
opportunities  that can be combined with us through an  acquisition of or merger
with another business or an acquisition of business assets. We intend to execute
our business plan through any possible and reasonable means,  including personal
contacts, professionals, securities broker-dealers, venture capital firms, other
members  of the  financial  community  and others  who may  present  unsolicited
proposals. Other than for the assets of iCodemedia,  described above, to date we
have not entered into any definitive  agreement,  term sheet or letter of intent
to complete a proposed business combination.

Benefits Achieved by Combining With Another Company

      There are certain  perceived  benefits to being a reporting company with a
class of publicly traded  securities.  Some of these benefits are the ability to
use  registered  securities to make  acquisitions  of assets or  businesses,  to
facilitate raising additional capital when needed, to facilitate  borrowing from
financial  institutions,   increased  shareholder  liquidity,  improved  trading
efficiency  of  a  company's  stock,   increased  visibility  in  the  financial
community,  market valuation of stock options for compensating key employees and
enhancement of the corporate image.

Business Entities That May Be Interested in a Business Combination with Us

      Business entities that may be interested in a business combination with us
include the following:


                                       1
<PAGE>

      1.    A company  that  desires to go public for the  purpose of having its
            securities used for the acquisition of assets or other businesses;

      2.    A company that is unable to find an  underwriter  for its securities
            or is unable to find an  underwriter to sell its securities on terms
            acceptable to the company;

      3.    A company  that desires to become  public with less  dilution of its
            common stock than would occur with an underwriting;

      4.    A company  that  believes it can obtain  investment  capital on more
            favorable terms after it has become public;

      5.    A foreign company that may desire to enter the equity markets of the
            United States;

      6.    A special  situation  company,  such as a  company  seeking a public
            market to satisfy redemption requirements under a qualified Employee
            Stock Option Plan;

      7.    A company that  desires to become  public in less time than would be
            required for a registration statement; or

      8.    A company that may desire any other benefits associated with being a
            company with publicly trading securities.

      A typical business  combination  among a public reporting company that has
insignificant  operations  and a private  company  involves  the transfer to the
owners of the private company a significant number of the issued and outstanding
shares of common  stock of the public  reporting  company,  and may  involve the
substitution or addition of management and/or directors from the private company
to the public reporting company.

      No  assurances  can be given that we will be able to enter into a business
combination,  what the terms of any business  combination will be, or the nature
of the business that may combine with us.

Competitive Business Conditions

      We compete  with  thousands  of other  public  reporting  companies  whose
business  operations  have proven  unsuccessful,  and whose only viable business
opportunity is to seek a business combination. We also compete with other public
and private  companies that are active in mergers and acquisitions of businesses
and assets which may be merger or acquisition  target  candidates for us. Nearly
all of such companies have significantly greater financial resources,  technical
expertise and managerial  capabilities  than us and,  consequently,  we are at a
competitive  disadvantage in identifying  possible  business  opportunities  and
successfully  completing a business combination.  We do not know of any accurate
method to assess  our  competitive  position  in the  mergers  and  acquisitions
market.

Governmental Regulation of our Business

      We currently do not have any operations and we do not produce any products
or  provide  any  services.  Accordingly,  we are not  presently  subject to any
business-specific  governmental  regulations.  However,  in the  event  that  we
complete a merger or  acquisition  transaction,  we will  become  subject to all
governmental  approval  requirements to which the merged or acquired business is
subject.

Employees

      As of September 21, 2005, we had one full time employee and five part time
employees. Each of these employees is an executive officer,  described below. We
believe that relations with our employees are good.


                                       2
<PAGE>

                                  RISK FACTORS

      Our business  involves a high degree of risk.  Potential  investors should
carefully  consider the risks and  uncertainties  described  below and the other
information  in this report before  deciding  whether to invest in shares of our
common stock.  Each of the following  risks may materially and adversely  affect
our business,  results of operations  and financial  condition.  These risks may
cause the market  price of our common  stock to decline,  which may cause you to
lose all or a part of the money you paid to buy our common stock.

RISKS RELATED TO OUR BUSINESS

FOR THE PAST TEN YEARS WE HAVE NOT HAD ANY BUSINESS  OPERATIONS  OR ANY REVENUES
AND WE DO NOT  HAVE  SIGNIFICANT  ASSETS.  IF WE DO NOT  CONSUMMATE  A  BUSINESS
COMBINATION,  WE WILL  CONTINUE  TO HAVE NO  REVENUES  AND OUR SHARE  PRICE WILL
LIKELY DECLINE.

      As of June 30, 2005, our assets consisted of $465,626 in cash and $341,898
in other current assets,  primarily  comprised of prepaid legal fees. Since July
1, 1995,  we have not  generated  any revenue.  As of June 30,  2005,  we had an
accumulated  deficit of  $609,715.  For the fiscal years ended June 30, 2005 and
2004, we incurred total expenses of $81,509 and $2,774,  respectively.  We will,
in all likelihood,  continue to incur operating  expenses without  corresponding
revenues,  at least  until the  consummation  of a business  combination  or the
successful  commercialization  of assets that we acquire.  As a result,  we will
continue to operate at a loss at least until a business combination with another
company can be  completed  or we  successfully  develop  acquired  assets into a
viable  business.  On  September  19, 2005,  we entered  into an asset  purchase
agreement with Philip Gatch, our Chief Technology Officer, and thereby completed
the purchase of certain assets from Mr. Gatch consisting of the iCodemedia suite
of websites and internet properties and all related  intellectual  property (the
"iCodemedia Assets").  The iCodemedia suite of websites consists of the websites
www.icodemedia.com,   www.iplaylist.com,   www.tunecast.com,  www.tunebucks.com,
www.podpresskit.com  and  www.tunespromo.com.  We plan to use these  websites to
provide a suite of  applications  and  services  to enable  content  creators to
publish and deliver content to existing and next generation  devices such as the
Apple  iPod  and the  Sony  PSP.  The  iCodemedia  Assets  are  presently  under
development  and there is no guarantee that the  iCodemedia  Assets will develop
into a viable  business.  If we are unable complete a business  combination,  or
develop assets that we acquire into a viable  business,  and generate  revenues,
our share price will likely decline.

AS OF THE DATE HEREOF, THE ONLY BUSINESS OPPORTUNITY FOR WHICH WE HAVE COMPLETED
A  BUSINESS  COMBINATION  OR ASSET  ACQUISITION  OR  ENTERED  INTO A  DEFINITIVE
AGREEMENT  FOR IS TO ACQUIRE  CERTAIN  ASSETS FROM A RELATED  PARTY.  WE DID NOT
CONDUCT A FORMAL  VALUATION TO DETERMINE THE FAIRNESS OF THE  CONSIDERATION  FOR
THE ACQUISITION, WHICH WAS COMPLETED ON SEPTEMBER 19, 2005. IF THE CONSIDERATION
PAID AND THE ACTUAL VALUE OF THE ASSETS ACQUIRED IS LESS THAN EXPECTED, THEN THE
MARKET VALUE OF OUR STOCK MAY DECLINE.

      On September 19, 2005, we completed the purchase of the iCodemedia  Assets
from  Mr.  Gatch,  our  Chief  Technology  Officer.  As  consideration  for  the
iCodemedia  Assets,  we issued Mr. Gatch  1,000,000  shares of our common stock,
which  is  approximately   7.1%  of  our  currently   outstanding   shares.  The
consideration  for the acquisition  was determined by arms' length  negotiations
between non-interested members of our management and Mr. Gatch, but there was no
formal valuation of the subject assets by an independent third party. We did not
obtain a  fairness  opinion by an  investment  banking  firm or other  qualified
appraiser.  Since the  acquisition of the assets did not require the approval of
our stockholders, we are unable to determine whether our stockholders agree with
the  determination  by our board of directors that the terms of the  acquisition
are fair and in the stockholders' best interests.  If the consideration paid and
the actual value of the assets  acquired is less than expected,  then the market
value of our stock may decline.

THE NATURE OF OUR PROPOSED  PLAN OF OPERATION IS EXTREMELY  SPECULATIVE  AND OUR
SUCCESS AND POTENTIAL  PROFITABILITY DEPENDS ON A NUMBER OF FACTORS THAT ARE NOT
WITHIN OUR CONTROL.  ACCORDINGLY,  IT IS VERY DIFFICULT FOR ANYONE TO ACCURATELY
EVALUATE THE MERITS AND RISKS OF AN  INVESTMENT  IN US. THESE RISKS MAKE IT VERY
LIKELY THAT OUR SHARE PRICE COULD DECLINE.


                                       3
<PAGE>

      The success of our proposed plan of operation depends to a great extent on
the operations and financial  condition of a target business to combine with us.
While our management  would prefer  business  combinations  with entities having
established  operating  histories,  there  can be no  assurance  that we will be
successful  in locating a candidate  that meets such  criteria.  In the event we
complete a business combination - an event for which there can be no assurance -
the  success  of our  operations  will  depend  upon  management  of the  target
business, other risks inherent to business combination transactions and specific
risks to the type of business acquired, which cannot be determined at this time.
Acquisitions  involve numerous risks,  including  increased expenses and working
capital  requirements  and the potential  loss of key employees and customers of
acquired companies.  In addition,  acquisitions involve financial risks, such as
potential liabilities of the acquired business, dilutive effects of the issuance
of  additional  equity  securities,  the  incurrence  of  additional  debt,  the
financial  impact of transaction  expenses and the  amortization of goodwill and
other intangible  assets involved in any transactions  that are accounted for by
using the purchase method of accounting, and possible adverse tax and accounting
effects.  All of the foregoing  increase the  speculative  nature of our plan of
operation and make it difficult to  accurately  evaluate the merits and risks of
an investment in us. All of the foregoing  factors make it very likely that that
our share price could decline.

FAILURE TO PROPERLY MANAGE OUR POTENTIAL  GROWTH  POTENTIAL WOULD BE DETRIMENTAL
TO HOLDERS OF OUR SECURITIES.

      Since we  currently  have no  operations  and our total assets at June 30,
2005  consisted  only of $465,626 in cash and $341,898 in other current  assets,
any significant growth will place considerable strain on our financial resources
and increase demands on our management and on our operational and administrative
systems,  controls  and  other  resources.  There can be no  assurance  that our
existing personnel,  systems, procedures or controls will be adequate to support
our operations in the future or that we will be able to  successfully  implement
appropriate  measures  consistent  with  our  growth  strategy.  As part of this
growth,  we may  have  to  implement  new  operational  and  financial  systems,
procedures  and controls to expand,  train and manage our employees and maintain
close coordination among our technical,  accounting,  finance,  marketing, sales
and editorial  staff. We cannot guarantee that we will be able to do so, or that
if we are able to do so, we will be able to effectively  integrate them into our
existing  staff and systems.  We may fail to adequately  manage our  anticipated
future  growth.  We will also need to continue to attract,  retain and integrate
personnel  in all  aspects  of our  operations.  Failure  to manage  our  growth
effectively could hurt our business.

CONSUMMATION  OF A BUSINESS  COMBINATION  INVOLVING  THE  ISSUANCE OF OUR EQUITY
SECURITIES AS CONSIDERATION OR PARTIAL  CONSIDERATION  WILL DILUTE THE OWNERSHIP
AND VOTING INTERESTS OF OUR CURRENT STOCKHOLDERS.

      Our plan for a business combination may involve the issuance of our equity
securities as consideration, or partial consideration, for acquiring a business.
If we issue  significant  amounts of our equity  securities as consideration for
such a business  combination,  the ownership and voting interests of our current
stockholders will be materially diluted.

WE CURRENTLY  COMPETE FOR BUSINESS  COMBINATIONS WITH MANY LARGER COMPANIES THAT
HAVE GREATER  FINANCIAL AND OTHER RESOURCES THAN WE DO. THOSE  ADVANTAGES  COULD
MAKE IT DIFFICULT FOR US TO IDENTIFY A FEASIBLE ACQUISITION TARGET.

      We  are  and  will  continue  to be an  insignificant  participant  in the
business of seeking mergers with and  acquisitions  of business  entities and/or
assets.  A large number of established  and  well-financed  entities,  including
venture capital firms,  are active in mergers and  acquisitions of companies and
assets which may be merger or acquisition  target  candidates for us. Nearly all
such  entities  have  significantly   greater  financial  resources,   technical
expertise and managerial  capabilities  than us and,  consequently,  we are at a
competitive  disadvantage in identifying  possible  business  opportunities  and
successfully completing a business combination.

SEC REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION TARGETS.

      Sections  13  and  15(d)  of  the  Exchange  Act,  and  rules  promulgated
thereunder,  require  reporting  companies to provide certain  information about
significant acquisitions,  including audited financial statements for businesses
acquired,  covering one, two, or three years,  depending on the relative size of
the  acquisition.  New SEC rules and forms effective in August 2005 require that
reporting  companies  with  insignificant  operations  must  file  such  audited
financial  statements  with the SEC within four business days of completing  the
acquisition.  The time and additional  costs that may be incurred by some target
businesses  to prepare such  financial  statements  may  significantly  delay or
essentially preclude consummation of an otherwise desirable acquisition by us.


                                       4
<PAGE>

EXISTING TAX LAWS COULD RESULT IN THE IMPOSITION OF BOTH FEDERAL AND STATE TAXES
IN CONNECTION WITH A BUSINESS COMBINATION,  WHICH MAY HAVE AN ADVERSE EFFECT OUR
BUSINESS.

      Federal and state tax consequences will, in all likelihood, be significant
considerations in any business  combination  undertaken by us.  Currently,  such
transactions  may be  structured  so as to result in tax-free  treatment  to all
parties  involved,  pursuant to various federal and state tax laws. We intend to
structure any business  combination  so as to minimize the federal and state tax
consequences  to both us and  the  target  business.  However,  there  can be no
assurance that such business  combination will meet the statutory and regulatory
requirements  of a tax-free  reorganization  or that the parties will obtain the
intended tax-free treatment upon a transfer of stock or assets. A non-qualifying
reorganization  could result in the  imposition  of both federal and state taxes
which may have an adverse effect on both parties to the transaction.

IF WE DO NOT MAINTAIN THE CONTINUED  SERVICE OF OUR EXECUTIVE  OFFICERS,  WE MAY
NEVER DEVELOP BUSINESS OPERATIONS.

      Our  success  is  dependent  upon the  continued  service  of our  current
executive officers. To date, we have entered into a written employment agreement
only with Philip  Gatch,  our Chief  Technology  Officer,  and none of our other
executive officers. In addition, we do not have key man life insurance on any of
our executive  officers.  While none of our executive officers currently has any
definitive plans to retire or leave our company in the near future,  any of such
persons could decide to leave us at any time to pursue other opportunities.  The
loss of services of any of our executive  management team could adversely affect
the opportunity of a business combination for us.

                        RISKS RELATED TO OUR COMMON STOCK

OUR HISTORIC  STOCK PRICE HAS BEEN  VOLATILE AND THE FUTURE MARKET PRICE FOR OUR
COMMON STOCK IS LIKELY TO CONTINUE TO BE VOLATILE.  FURTHER,  THE LIMITED MARKET
FOR OUR SHARES WILL MAKE OUR PRICE MORE VOLATILE. THIS MAY MAKE IT DIFFICULT FOR
YOU TO SELL OUR COMMON STOCK FOR A POSITIVE RETURN ON YOUR INVESTMENT.

      The  public  market  for our  common  stock  has  historically  been  very
volatile.  Over the past two fiscal years, the market price for our common stock
as quoted on the OTC Bulletin Board has ranged from $0.01 to $0.45.  The closing
sale price for our common stock on September  21, 2005 was $0.65 per share.  Any
future  market  price for our shares is likely to continue to be very  volatile.
This price volatility may make it more difficult for you to sell shares when you
want at prices you find attractive.  We do not know of any one particular factor
that has caused  volatility  in our stock  price.  However,  the stock market in
general has experienced  extreme price and volume  fluctuations  that have often
been unrelated or  disproportionate  to the operating  performance of companies.
Broad market  factors and the  investing  public's  negative  perception  of our
business may reduce our stock price,  regardless of our  operating  performance.
Further,  the market for our common  stock is limited  and we cannot  assure you
that a larger  market will ever be developed or  maintained.  The average  daily
trading volume of our common stock has historically been  insignificant.  Market
fluctuations and volatility,  as well as general economic,  market and political
conditions,  could  reduce  our  market  price.  As a  result,  this may make it
difficult or  impossible  for you to sell our common stock or to sell our common
stock for a positive return on your investment.

OUR  COMMON  STOCK IS  SUBJECT  TO THE  "PENNY  STOCK"  RULES OF THE SEC AND THE
TRADING MARKET IN OUR  SECURITIES IS LIMITED,  WHICH MAKES  TRANSACTIONS  IN OUR
STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

      The SEC has adopted  Rule 3a51-1 which  establishes  the  definition  of a
"penny stock," for the purposes  relevant to us, as any equity security that has
a market  price of less than $5.00 per share or with an  exercise  price of less
than  $5.00 per  share,  subject  to  certain  exceptions.  For any  transaction
involving a penny stock, unless exempt, Rule 15g-9 requires:

      o     that a broker or dealer approve a person's  account for transactions
            in penny stocks; and
      o     the broker or dealer  receive from the investor a written  agreement
            to the  transaction,  setting forth the identity and quantity of the
            penny stock to be purchased.


                                       5
<PAGE>

      In order to approve a person's  account for  transactions in penny stocks,
the broker or dealer must:

      o     obtain financial information and investment experience objectives of
            the person; and
      o     make a  reasonable  determination  that  the  transactions  in penny
            stocks are  suitable  for that person and the person has  sufficient
            knowledge  and  experience  in  financial  matters  to be capable of
            evaluating the risks of transactions in penny stocks.

      The broker or dealer  must also  deliver,  prior to any  transaction  in a
penny stock, a disclosure  schedule  prescribed by the SEC relating to the penny
stock market, which, in highlight form:

      o     sets  forth  the  basis on  which  the  broker  or  dealer  made the
            suitability determination; and
      o     that the broker or dealer received a signed,  written agreement from
            the investor prior to the transaction.

      Disclosure  also has to be made  about  the  risks of  investing  in penny
stocks  in  both  public  offerings  and in  secondary  trading  and  about  the
commissions payable to both the broker-dealer and the registered representative,
current  quotations for the securities and the rights and remedies  available to
an  investor  in cases of fraud in penny stock  transactions.  Finally,  monthly
statements  have to be sent  disclosing  recent price  information for the penny
stock held in the account and information on the limited market in penny stocks.

      Generally,  brokers  may  be  less  willing  to  execute  transactions  in
securities  subject to the "penny stock" rules.  This may make it more difficult
for  investors  to dispose of our common stock and cause a decline in the market
value of our stock.

Item 2.    Description of Property.

      Our headquarters are located at 100 Wilshire Boulevard,  Suite 1750, Santa
Monica, CA 90401, where we occupy office space with Patient Safety Technologies,
Inc. and Ault Glazer Bodnar & Company  Investment  Management  LLC at no cost to
us. Our office space is approximately 2,000 square feet.

Item 3.    Legal Proceedings.

      We are not a party to any pending  legal  proceeding,  nor is our property
the subject of a pending legal  proceeding.  None of our directors,  officers or
affiliates is involved in a proceeding adverse to our business or has a material
interest adverse to our business.

Item 4.    Submission of Matters to a Vote of Security Holders.

      No matter was  submitted to a vote of security  holders  during the fourth
quarter of the fiscal year covered by this report.

                                     PART II

Item 5.    Market for Common Equity and Related Stockholder Matters.

Market Information

      Our common stock is currently  quoted on the OTC Bulletin  Board under the
symbol  "DGCO." For the periods  indicated,  the following  table sets forth the
high and low sales prices per share of common stock.

<TABLE>
<CAPTION>
                                                 Fiscal 2005            Fiscal 2004
                                             -----------------------------------------
Fiscal Quarter                               High       Low        High        Low
--------------------------------------------------------------------------------------
<S>                                          <C>        <C>        <C>         <C>
First Quarter Ended September 30             $0.35      $0.06      $0.10       $0.01
Second Quarter Ended December 31             $0.35      $0.07      $0.15       $0.01
Third Quarter Ended March 31                 $0.35      $0.14      $0.13       $0.06
Fourth Quarter Ended June 30                 $0.45      $0.18      $0.18       $0.07
</TABLE>


                                       6
<PAGE>

Holders

      As of  September  21,  2005,  our  shares  of  common  stock  were held by
approximately 288 stockholders of record.

Dividends

      We have not declared any dividends to date.  We have no present  intention
of paying any cash dividends on our common stock in the foreseeable  future,  as
we intend to use  earnings,  if any,  to generate  growth.  The payment by us of
dividends,  if any, in the future,  rests within the  discretion of our Board of
Directors and will depend,  among other things,  upon our earnings,  our capital
requirements  and our financial  condition,  as well as other relevant  factors.
There are no  restrictions  in our  articles  of  incorporation  or bylaws  that
restrict us from declaring dividends.

Recent Sales of Unregistered Securities

      On May 18, 2005, we sold Bodnar Capital  Management,  LLC 2,941,176 shares
of common  stock and  warrants  to purchase an  additional  3,000,000  shares of
common stock.  Steven Bodnar is a managing member of and may be deemed a control
person of Bodnar Capital Management, LLC. The Company received gross proceeds of
approximately  $500,000 from the sale of the common stock and warrants. The sale
was made in a private placement exempt from registration  requirements  pursuant
to  Section  4(2) of the  Securities  Act of  1933,  as  amended,  and  Rule 506
promulgated thereunder. The shares of common stock were sold at a price of $0.17
per share.  In  addition,  in  consideration  for the  purchase of the shares of
common stock,  the Company issued Bodnar Capital  Management,  LLC: (a) callable
warrants to purchase  500,000  shares of common stock with an exercise  price of
$0.25  exercisable for a period of five years; (b) callable warrants to purchase
500,000 shares of common stock with an exercise price of $0.35 exercisable for a
period of five years; (c) callable warrants to purchase 500,000 shares of common
stock with an exercise  price of $0.42  exercisable  for a period of five years;
(d)  callable  warrants  to  purchase  500,000  shares of common  stock  with an
exercise  price of $0.75  exercisable  for a period of five years;  (e) callable
warrants to purchase  500,000  shares of common stock with an exercise  price of
$1.00  exercisable  for a period of five  years;  and (f)  callable  warrants to
purchase  500,000  shares  of  common  stock  with an  exercise  price  of $1.50
exercisable  for a period of five  years.  The sale of the above  securities  to
Bodnar  Capital  Management,  LLC  was  exempt  from  registration  requirements
pursuant  to  Section  4(2) of the  Securities  Act of  1933,  as  amended  (the
"Securities Act"), and Rule 506 promulgated thereunder.

      On July 20, 2005, as consideration  for service on our Board of Directors,
we granted to each of Melanie Glazer, Alice M. Campbell, Darrell Grimsley, Lynne
Silverstein  and William B. Horne options to purchase  250,000  shares of common
stock with an exercise  price of $0.25 per share.  These stock options will vest
quarterly  over two years,  with the first 31,250  options of each grant to vest
September  30,  2005.  The  issuance  of these  stock  options  was exempt  from
registration requirements pursuant to Section 4(2) of the Securities Act.

      On July 20, 2005,  as  consideration  for service as Chairman of our Audit
Committee,  we granted Ms. Campbell options to purchase 100,000 shares of common
stock with an exercise  price of $0.25 per share.  These stock options will vest
quarterly  over two years,  with the first 12,500  options to vest September 30,
2005.  The  issuance  of  these  stock  options  was  exempt  from  registration
requirements pursuant to Section 4(2) of the Securities Act.

      On July 20, 2005,  as  consideration  for service as a member of our Audit
Committee,  we granted Ms.  Glazer  options to purchase  50,000 shares of common
stock with an exercise  price of $0.25 per share.  These stock options will vest
quarterly  over two years,  with the first 6,250  options to vest  September 30,
2005.  The  issuance  of  these  stock  options  was  exempt  from  registration
requirements pursuant to Section 4(2) of the Securities Act.

      On July 20,  2005,  as  consideration  for service as our Chief  Executive
Officer,  we granted Mr. Ault  options to  purchase  2,000,000  shares of common
stock with an exercise  price of $0.25 per share.  These stock options will vest
quarterly over two years,  with the first 250,000  options to vest September 30,
2005.  The  issuance  of  these  stock  options  was  exempt  from  registration
requirements pursuant to Section 4(2) of the Securities Act.


                                       7
<PAGE>

      On July 20,  2005,  as  consideration  for  service  as our  President  of
Operations,  we granted  Kathryn  Queen  options to purchase  750,000  shares of
common stock with an exercise price of $0.25 per share. These stock options will
vest quarterly  over two years,  with the first 93,750 options to vest September
30, 2005. Also on July 20, 2005, as an incentive  bonus,  subject to the earlier
to occur of us obtaining a market  capitalization of $25 million at December 31,
2006,  or  prior to  December  31,  2006,  if we  obtain,  and  maintain  for 21
consecutive days, a market capitalization of $25 million, we agreed to grant Ms.
Queen options to purchase  750,000  shares of common stock.  These stock options
will vest  quarterly  over four years from the date of grant.  The  issuance  of
these  stock  options  was exempt  from  registration  requirements  pursuant to
Section 4(2) of the Securities Act.

      On July 20, 2005,  as  consideration  for service as our Chief  Technology
Officer,  we granted  Philip Gatch options to purchase  250,000 shares of common
stock with an exercise  price of $0.25 per share.  These stock options will vest
in equal amounts on July 20, 2005, 2006 & 2007, with the first 83,333 options to
vest July 20, 2005. Also on July 20, 2005, we agreed to issue  restricted  stock
valued at $12,500  quarterly  during the  three-year  term of his  employment as
Chief  Technology  Officer.  The issuance of these stock options was exempt from
registration requirements pursuant to Section 4(2) of the Securities Act.

      On July 20,  2005,  as  consideration  for service as our Chief  Financial
Officer, we granted Mr. Horne options to purchase 250,000 shares of common stock
with an  exercise  price of $0.25  per  share.  These  stock  options  will vest
quarterly  over two years,  with the first 31,250  options to vest September 30,
2005.  The  issuance  of  these  stock  options  was  exempt  from  registration
requirements pursuant to Section 4(2) of the Securities Act.

      On July 20,  2005,  as  consideration  for service as our  Controller,  we
granted Jeanne Olsky options to purchase  100,000 shares of common stock with an
exercise price of $0.25 per share.  These stock options will vest quarterly over
two  years,  with the first  12,500  options to vest  September  30,  2005.  The
issuance  of these  stock  options  was exempt  from  registration  requirements
pursuant to Section 4(2) of the Securities Act.

      On July 20, 2005, as consideration for service as our Corporate Secretary,
we granted Ms.  Silverstein  options to purchase  150,000 shares of common stock
with an  exercise  price of $0.25  per  share.  These  stock  options  will vest
quarterly  over two years,  with the first 18,750  options to vest September 30,
2005.  The  issuance  of  these  stock  options  was  exempt  from  registration
requirements pursuant to Section 4(2) of the Securities Act.

      On  September  19,  2005,  we  purchased  certain  assets  from Mr.  Gatch
consisting of the iCodemedia  suite of websites and internet  properties and all
related intellectual property (the "iCodemedia Assets"). The iCodemedia suite of
websites  consists  of  the  websites   www.icodemedia.com,   www.iplaylist.com,
www.tunecast.com, www.tunebucks.com, www.podpresskit.com and www.tunespromo.com.
As consideration for the iCodemedia Assets, we issued Mr. Gatch 1,000,000 shares
of our common  stock.  The issuance of these shares to Mr. Gatch was exempt from
registration  requirements  pursuant to Section 4(2) of the  Securities  Act and
Rule 506 promulgated thereunder.

Item 6.    Management's Discussion and Analysis or Plan of Operation.

Forward-Looking Statements

      The information in this annual report contains forward-looking statements.
All statements  other than statements of historical fact made in this report are
forward  looking.  In  particular,  the  statements  herein  regarding  industry
prospects  and  future   results  of   operations  or  financial   position  are
forward-looking  statements.  Forward-looking  statements  reflect  management's
current expectations and are inherently uncertain. Our actual results may differ
significantly from management's expectations.

      The following  discussion and analysis should be read in conjunction  with
the  financial  statements  included  herewith.  This  discussion  should not be
construed to imply that the results  discussed herein will necessarily  continue
into the future,  or that any  conclusion  reached  herein will  necessarily  be
indicative of actual operating results in the future. Such discussion represents
only the best present assessment of our management.


                                       8
<PAGE>

Plan of Operation

      Our plan of  operation  for the coming year is to  identify  and acquire a
favorable  business  opportunity.  We do not plan to limit  our  options  to any
particular  industry,  but will  evaluate  each  opportunity  on its merits.  We
believe we have sufficient capital to continue operations until the end of 2005.
After that period if we do not enter a business combination,  we anticipate that
our owners,  affiliates,  and consultants  will provide  sufficient  capital for
another  year,  but there can be no  assurance  that  this  expectation  will be
realized.

      We have incurred  losses since our inception.  We will continue to sustain
losses until we  establish  profitable  operations  through an  acquisition,  or
otherwise.  The achievement  and/or success of these planned measures,  however,
cannot be determined  at this time. We do not expect to generate any  meaningful
revenue or incur significant  operating  expenses unless and until we acquire an
interest in an operating company.

Off-Balance Sheet Arrangements

      We do not have any off  balance  sheet  arrangements  that are  reasonably
likely to have a current or future effect on our financial condition,  revenues,
results of operations, liquidity or capital expenditures.

Critical Accounting Policies

      A  discussion  and  analysis  of our  financial  condition  and results of
operations are based upon our financial statements,  which have been prepared in
accordance with accounting  principles  generally accepted in the United States.
The  preparation  of these  financial  statements  requires  management  to make
estimates  and  assumptions   that  affect  the  reported   amounts  of  assets,
liabilities,  revenues and expenses and related  disclosure of contingent assets
and liabilities.  Note 2 to the financial  statements  describes the significant
accounting  policies  and  methods  used  in the  preparation  of the  financial
statements.  On an ongoing basis,  management evaluates its estimates,  the most
critical are those that are both important to the  presentation of our financial
condition and results of operations  and require  management's  most  difficult,
complex, or subjective judgments.

Accounting Developments

      In December 2004, Statement of Financial Accounting Standards ("SFAS") No.
123(R), "Share-Based Payment," which addresses the accounting for employee stock
options, was issued. SFAS 123(R) revises the disclosure  provisions of SFAS 123,
"Accounting for Stock Based Compensation" and supersedes  Accounting  Principles
Board ("APB") Opinion No. 25,  "Accounting for Stock Issued to Employees."  SFAS
123(R)  requires that the cost of all employee stock  options,  as well as other
equity-based compensation arrangements, be reflected in the financial statements
based on the estimated fair value of the awards. This statement is effective for
us as of the  beginning  of the first  interim or annual  reporting  period that
begins after June 15, 2005. We adopted  Statement 123(R) as of July 1, 2005, and
it did not have a material effect on our accounting for employee stock options.

Liquidity and Capital Resources

      Our total assets were  $807,524 at June 30, 2005 versus $3,991 at June 30,
2004.  The change in total assets is  primarily  attributable  to our  financing
activities and the issuance of common stock for prepaid legal services valued at
approximately $325,000.

      At June 30, 2005 and June 30, 2004, we had $465,626 and $3,991 in cash and
cash  equivalents,  respectively,  representing an increase of $461,635.  During
2005, we raised net proceeds of $500,000 in a private placement transaction.  We
believe that existing cash  resources  should be adequate to fund our operations
for the twelve months subsequent to June 30, 2005. However,  long-term liquidity
is  dependent  on our ability to attain  future  profitable  operations.  We may
undertake  additional debt or equity  financings to better enable us to grow and
meet our future operating and capital requirements. We do not currently have any
definitive  plans or  commitments  for such  financing and there is no assurance
that we will be successful in obtaining such financing.

      Operating  activities  used  $38,365  of cash for the year  ended June 30,
2005, compared to using $3,009 for the year ended June 30, 2004.


                                       9
<PAGE>

      Cash provided by financing activities for the year ended June 30, 2005, of
$500,000  resulted  from the net  proceeds  from  issuance  of common  stock and
warrants  to  purchase  common  stock.  On  May  18,  2005,  we  entered  into a
subscription  agreement with Bodnar Capital Management,  LLC ("Bodnar Capital"),
pursuant to which we sold Bodnar  Capital  2,941,176  shares of our common stock
and warrants to purchase an additional  3,000,000 shares of our common stock. We
received  gross  proceeds  of  $500,000  from the sale of stock and  warrants to
Bodnar Capital.  The warrants are  exercisable  for a period of five years,  are
callable, under certain situations,  upon 30 days prior written notice, and have
exercise prices as follows:  (a) 500,000 shares with an exercise price of $0.25;
(b) 500,000 shares with an exercise  price of $0.35;  (c) 500,000 shares with an
exercise price of $0.42; (d) 500,000 shares with an exercise price of $0.75; (e)
500,000  shares with an  exercise  price of $1.00;  (f)  500,000  shares with an
exercise  price of  $1.50.  We  intend  to use the  proceeds  from  the  private
placement  transaction  primarily for general corporate  purposes and to develop
the assets  acquired in the iCodemedia  transaction,  described  under Item 1 of
this report.

Results of Operations

      Expenses

      Operating  expenses  were  $81,509 in the fiscal year ended June 30, 2005,
and $2,774 in the fiscal  year ended June 30,  2004.  Operating  expenses in the
June 30, 2005 fiscal year primarily  consisted of  professional  fees,  employee
compensation, and travel related expenses.

      Professional  fees were  approximately  $47,000  higher in the fiscal year
ended June 30, 2005 compared to the year ended June 30, 2004 due to  significant
increases in legal and accounting fees. In anticipation of an increased level of
legal work required to complete a business  combination  or acquire  assets that
can then be  developed  into a  viable  business,  and  generate  revenues,  our
management,  on May 5,  2005,  retained  Sichenzia  Ross  Friedman  Ference  LLP
("Sichenzia").  Under the terms of the agreement, which was amended on September
23, 2005,  Sichenzia  agreed to represent us in connection  with our  continuing
reporting  requirements,  as well as our general corporate matters.  The term of
the agreement is from May 1, 2005 through March 31, 2007.

      In  consideration  for Sichenzia's  services,  we agreed to a fixed fee of
$50,000 and to issue  Sichenzia  500,000 shares of our common stock.  The common
stock  issued to  Sichenzia  was valued at  approximately  $325,000 and is being
amortized  over the term of the  agreement.  At June 30,  2005 we had  amortized
approximately  $34,000. The increase in accounting fees of approximately $10,000
is  attributable  to an  increase  in the amount of work  required to perform an
audit with a larger number of transactions and overall business activity.

      During May 2005,  we hired a full time  employee who devoted a significant
amount of time evaluating  potential  business  models.  In addition to employee
compensation  of  approximately  $11,000,  travel  related  expenses,  primarily
attributed  to  the   activities  of  our  full  time   employee,   amounted  to
approximately $12,000 during the fiscal year ended June 30, 2005.

Contractual Obligations

      We did not have any contractual obligations as of June 30, 2005


                                       10
<PAGE>

Item 7.    Financial Statements.

                                    DIGICORP
                          (A Development Stage Company)

                          INDEX TO FINANCIAL STATEMENTS

                                                                         Page
                                                                         ----

     Report of Jones Simkins, P.C........................................ 12

     Balance Sheets as of
              June 30, 2005 and 2004..................................... 13

     Statements of Operations for the years
              ended June 30, 2005, and 2004.............................. 14

     Statements of Stockholders' Equity for the years
              ended June 30, 2005 and 2004............................... 15

     Statements of Cash Flows for the years
              ended June 30, 2005 and 2004............................... 16

     Notes to Financial Statements.......................................17-20


                                       11
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Stockholders' and
Board of Directors of
DigiCorp


We have audited the  accompanying  balance  sheets of DigiCorp (a  developmental
stage  company),  as of June 30,  2005 and 2004 and the  related  statements  of
operations,  stockholders'  equity,  and cash flows for the years then ended and
the cumulative  amounts since inception of developmental  stage. These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance  with standards  established by the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of DigiCorp (a developmental stage
company), as of June 30, 2005 and 2004 and the results of its operations and its
cash flows for the years then ended in  conformity  with  accounting  principles
generally accepted in the United States of America.



/s/ JONES SIMKINS, P.C.
Logan, Utah
September 23, 2005


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                       DIGICORP
                             (A Development Stage Company)
==========================================================================================================

Balance Sheets

----------------------------------------------------------------------------------------------------------
                                                                               June 30,         June 30,
                                                                                2005             2004
                                                                             -----------      -----------

ASSETS

CURRENT ASSETS

<S>                                                                          <C>              <C>
Cash and cash equivalents                                                    $   465,626      $     3,991
Other current assets                                                             341,898
                                                                             -----------      -----------

TOTAL ASSETS                                                                 $   807,524      $     3,991
                                                                             ===========      ===========
----------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable and accrued liabilities                                     $    59,158      $        --
                                                                             -----------      -----------

TOTAL CURRENT LIABILITIES                                                         59,158

STOCKHOLDERS' EQUITY

Common stock, $0.001 par value: 50,000,000 shares authorized;
    13,184,033 and 9,742,857 shares issued and outstanding, respectively          13,184            9,743
Paid-in capital                                                                1,344,897          523,338
Accumulated deficit                                                             (511,627)        (511,627)
Deficit accumulated during the development stage                                 (98,088)         (17,463)
                                                                             -----------      -----------

TOTAL STOCKHOLDERS' EQUITY                                                       748,366            3,991
                                                                             -----------      -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                   $   807,524      $     3,991
                                                                             ===========      ===========

----------------------------------------------------------------------------------------------------------
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       13
<PAGE>

<TABLE>
<CAPTION>
                                    DIGICORP
                          (A Development Stage Company)
=================================================================================================

Statements of Operations

-------------------------------------------------------------------------------------------------
                                                          Years Ended               Cumulative
                                                   June 30,         June 30,
                                                    2005              2004            Amounts
<S>                                             <C>               <C>               <C>
REVENUES                                        $         --      $         --      $         --
                                                ------------      ------------      ------------

EXPENSES
    Salaries and employee benefits                    11,233                              11,233
    Professional fees                                 48,826                              48,826
    Taxes other than income taxes                      1,154                               1,154
    General and administrative                        20,296             2,774            37,759
                                                ------------      ------------      ------------

   Operating expenses                                 81,509             2,774            98,972
                                                ------------      ------------      ------------

   Operating loss                                    (81,509)           (2,774)          (98,972)

   Interest, dividend income and other, net              884                                 884
                                                ------------      ------------      ------------

   Net loss before income taxes                      (80,625)           (2,774)          (98,088)

   Provision for income taxes                             --                --                --
                                                ------------      ------------      ------------

   Net loss                                     $    (80,625)     $     (2,774)
                                                ============      ============

   Basic and diluted net loss per common share  $      (0.01)     $         --

   Weighted average common shares outstanding     10,166,064         9,576,000
                                                ============      ============

-------------------------------------------------------------------------------------------------
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       14
<PAGE>

<TABLE>
<CAPTION>
                                    DIGICORP
                          (A Development Stage Company)
====================================================================================================================================

Statements of Stockholders' Equity
July 1, 1995 to June 30, 2005

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Deficit
                                                                                                   Accumulated
                                               Common Stock                                         During the         Total
                                          ----------------------     Paid-In       Accumulated     Development      Shareholders'
                                            Shares       Amount      Capital         Deficit          Stage            Equity
                                          -----------   --------   -----------    ------------    --------------    --------------
<S>                                         <C>         <C>        <C>            <C>             <C>               <C>
BALANCES, July 1, 1995                      7,842,857   $  7,843   $   504,238    $   (511,627)   $           --    $          454
Issuance of common stock for cash             200,000        200         3,800              --                --             4,000
Net loss                                           --         --            --              --            (3,774)           (3,774)
                                          -----------   --------   -----------    ------------    --------------    --------------
BALANCES, June 30, 1996                     8,042,857   $  8,043   $   508,038    $   (511,627)   $       (3,774)   $          680

Net loss                                           --         --            --              --              (169)             (169)
                                          -----------   --------   -----------    ------------    --------------    --------------
BALANCES, June 30, 1997                     8,042,857   $  8,043   $   508,038    $   (511,627)   $       (3,943)   $          511

Net loss                                           --         --            --              --               (45)              (45)
                                          -----------   --------   -----------    ------------    --------------    --------------
BALANCES, June 30, 1998                     8,042,857   $  8,043   $   508,038    $   (511,627)   $       (3,988)   $          466

Net loss                                           --         --            --              --              (202)             (202)
                                          -----------   --------   -----------    ------------    --------------    --------------
BALANCES, June 30, 1999                     8,042,857   $  8,043   $   508,038    $   (511,627)   $       (4,190)   $          264

Net loss                                           --         --            --              --              (264)             (264)
                                          -----------   --------   -----------    ------------    --------------    --------------
BALANCES, June 30, 2000                     8,042,857   $  8,043   $   508,038    $   (511,627)   $       (4,454)   $           --

Issuance of common stock for:
Cash                                          500,000        500         4,500              --                --             5,000
Services                                      500,000        500         4,500              --                --             5,000
Net loss                                           --         --            --              --            (5,110)             (169)
                                          -----------   --------   -----------    ------------    --------------    --------------
BALANCES, June 30, 2001                     9,042,857   $  9,043   $   517,038    $   (511,627)   $       (9,564)   $        4,890

Net loss                                           --         --            --              --            (2,808)           (2,808)
                                          -----------   --------   -----------    ------------    --------------    -------------
BALANCES, June 30, 2002                     8,042,857   $  9,043   $   517,038    $   (511,627)   $      (12,372)   $        2,082

Net loss                                           --         --            --              --            (2,317)           (2,317)
                                          -----------   --------   -----------    ------------    --------------    --------------
BALANCES, June 30, 2003                     8,042,857   $  9,043   $   517,038    $   (511,627)   $      (14,689)   $         (235)

Issuance of common stock for cash             700,000        700         6,300              --                --             7,000
Net loss                                           --         --            --              --            (2,774)           (2,774)
                                          -----------  ---------   -----------    ------------    --------------    --------------
BALANCES, June 30, 2004                     9,742,857   $  9,743   $   523,338    $   (511,627)   $     (17,463 )   $        3,991

Issuance of common stock for:
Cash                                        2,941,176      2,941       497,059              --                --           500,000
Services                                      500,000        500       324,500              --                --           325,000
Net loss                                           --         --            --              --           (80,625)          (80,625)
                                          -----------   --------   -----------    ------------    --------------    --------------
BALANCES, June 30, 2005                    13,184,033   $ 13,184   $ 1,344,897    $   (511,627)   $      (98,088)   $      748,366

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       15
<PAGE>

<TABLE>
<CAPTION>
                                    DIGICORP
                          (A Development Stage Company)
========================================================================================================

Statements of Cash Flows

--------------------------------------------------------------------------------------------------------
                                                                      Year Ended
                                                                  June 30,      June 30,      Cumulative
                                                                    2005         2004          Amounts
<S>                                                             <C>            <C>            <C>
Cash flows from operating activities:
  Net loss                                                      $ (80,625)     $  (2,774)     $ (98,088)
  Adjustments to reconcile net loss to net cash (used in)
    provided by operating activities:
      Stock issued for services                                   325,000                       330,000
      Changes in operating assets and liabilities:
          Other current assets                                   (341,898)                     (341,898)
          Accounts payable and accrued liabilities                 59,158           (235)        59,158
                                                                ---------      ---------      ---------

          Net cash used in operating activities                   (38,365)        (3,009)       (50,828)
                                                                ---------      ---------      ---------

Cash flows from financing activities:
  Proceeds from issuance of common stock and warrants             500,000          7,000        516,000
                                                                ---------      ---------      ---------

          Net cash provided by financing activities               500,000          7,000        516,000
                                                                ---------      ---------      ---------

Net increase in cash and cash equivalents                         461,635          3,991        465,172

Cash and cash equivalents at beginning of period                    3,991              0            454
                                                                ---------      ---------      ---------

Cash and cash equivalents at end of period                      $ 465,626      $   3,991      $ 465,626
                                                                =========      =========      =========

--------------------------------------------------------------------------------------------------------
</TABLE>

   The accompanying notes are an integral part of these condensed consolidated
                              financial statements.


                                       16
<PAGE>

Digicorp
Notes to Financial Statements
June 30, 2005

1. DESCRIPTION OF BUSINESS

Digicorp  ("the  Company") was organized  under the laws of the State of Utah on
July  19,  1983.  On July 1,  1995,  the  Company  became  a  development  stage
enterprise  as defined in SFAS No. 7 when it sold its  assets  and  changed  its
business plan.  Accordingly the financial  statements include cumulative amounts
since July 1, 1995.  The Company  proposes to seek  business  ventures that will
allow for long-term growth.

2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The  financial  statements  have been  prepared in  accordance  with  accounting
principles generally accepted in the United States ("GAAP").  The preparation of
financial  statements  in  conformity  with  GAAP  requires  management  to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements and  accompanying  notes.  These  estimates are based on knowledge of
current events and anticipated future events and accordingly, actual results may
differ from those estimates.

Cash and Cash equivalents

The Company considers only highly liquid  investments such as money market funds
and  commercial  paper with  maturities  of 90 days or less at the date of their
acquisition as cash and cash equivalents.

The Company  maintains cash in bank and deposit  accounts which,  at times,  may
exceed federally  insured limits.  The Company has not experienced any losses in
such accounts.  The Company believes it is not exposed to any significant credit
risk on cash and cash equivalents.

Liquidity

Since June 30, 1995, the Company has been a development  stage  enterprise  with
recurring  losses that has relied upon the  issuance of its common stock to fund
operations.  Management believes that existing cash resources should be adequate
to fund its operations for the 12 months  subsequent to June 30, 2005.  However,
long term  liquidity  is  dependent on the  Company's  ability to attain  future
profitable operations.

Income Taxes

Deferred  income  taxes are  provided  in amounts  sufficient  to give effect to
temporary  differences between financial and tax reporting,  principally related
to net operating loss carryforwards.

Stock-Based Compensation

Prior to July 1, 2005, the Company  accounted for  stock-based  compensation  in
accordance with Accounting  Principles Board ("APB") Opinion No. 25,  Accounting
for Stock  Issued to  Employees,  and related  interpretations,  as permitted by
Statement of Financial  Accounting  Standards  ("SFAS") No. 123,  Accounting for
Stock-Based  Compensation.  In  December  2004,  SFAS No.  123(R),  "Share-Based
Payment," which addresses the accounting for employee stock options, was issued.
SFAS 123(R)  revises the  disclosure  provisions of SFAS 123 and  supercedes APB
Opinion  No.  25.  SFAS  123(R)  requires  that the cost of all  employee  stock
options, as well as other equity-based compensation  arrangements,  be reflected
in the financial  statements over the vesting period based on the estimated fair
value of the  awards.  This  statement  is  effective  for the Company as of the
beginning of the first annual  reporting period that begins after June 15, 2005.
The Company  adopted  SFAS  123(R) as of July 1, 2005.  Since the Company had no
outstanding  options as of June 30, 2005 and 2004, SFAS 123(R) would have had no
impact on the Company's  financial  statements had the Company  elected to adopt
the provisions of SFAS 123(R) in an earlier period.


                                       17
<PAGE>

Digicorp
Notes to Financial Statements (continued)


Recent Accounting Pronouncements

SFAS No. 151,  Inventory Costs - an amendment of ARB No. 43, Chapter 4, SFAS No.
152, Accounting for Real Estate Time-Sharing Transactions - an amendment of FASB
Statements  No. 66 and 67, SFAS No. 153,  Exchanges of  Nonmonetary  Assets - an
amendment of APB Opinion No 29, and SFAS No. 154,  Accounting  Changes and Error
Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3, were
recently issued. SFAS No 151, 152, 153, and 154 have no current applicability to
the  Company or their  effect on the  financial  statements  would not have been
significant.

3. INCOME TAXES

For the years ended June 30, 2005, and 2004,  Digicorp's tax (provision) benefit
was based on the following:

<TABLE>
<CAPTION>
                                                    Years Ended
                                            June 30,         June 30,       Cumulative
                                              2005             2004           Amounts
<S>                                       <C>             <C>             <C>
Income tax benefit at statutory rate      $    28,000     $     1,000     $     47,000
Change in valuation allowance                 (28,000)         (1,000)         (47,000)
                                          ------------    ------------    -------------
                                          $        --     $        --     $         --
                                          ============    ============    =============
</TABLE>

Deferred  income tax  benefit  (provision)  reflects  the  impact of  "temporary
differences"  between amounts of assets and liabilities for financial  reporting
purposes and such amounts as measured by tax laws.

At June 30, 2005 and 2004, deferred tax assets consist of:

                                                    Years Ended
                                             June 30,        June 30,
                                              2005            2004

Net operating loss carryforwards          $    47,000     $    26,000
Valuation allowance                           (47,000)        (26,000)
                                          ------------    ------------
                                          $        --     $         --
                                          ============    ============

At June 30, 2005,  Digicorp had net operating loss  carryforwards for income tax
purposes of  approximately  $138,000,  which  began to expire in 2005.  At a 34%
effective   tax  rate  the  after-tax  net  benefit  from  this  loss  would  be
approximately  $47,000.  A change in the  ownership  of a  majority  of the fair
market value of the Company's common stock can delay or limit the utilization of
existing net operating loss carryforwards  pursuant to the Internal Revenue Code
Section 382.

During the year ended June 30, 2005,  the Company had  approximately  $22,000 of
net operating loss carryforwards which expired.


                                       18
<PAGE>

Digicorp
Notes to Financial Statements (continued)

4. LOSS PER COMMON SHARE

Loss per common share is based on the weighted  average  number of common shares
outstanding. The Company complies with SFAS No. 128, "Earnings Per Share," which
requires dual  presentation of basic and diluted  earnings per share on the face
of the statements of operations.  Basic loss per share excludes  dilution and is
computed by dividing  income  (loss)  available  to common  stockholders  by the
weighted-average  common  shares  outstanding  for the period.  Diluted loss per
share reflects the potential dilution that could occur if convertible  preferred
stock or  debentures,  options and warrants were to be exercised or converted or
otherwise  resulted  in the  issuance  of common  stock that then  shared in the
earnings of the entity.

Warrants  outstanding at June 30, 2005, to purchase  3,000,000  shares of common
stock, were not included in the computation of diluted net loss per common share
for the year June 30, 2005, as their inclusion would have been antidilutive.  At
June 30, 2004 there were no outstanding warrants.

5. EQUITY TRANSACTIONS

On September 23, 2005, the Company  amended the terms of a legal  representation
agreement initially entered into with Sichenzia Ross Friedman Ference LLP on May
5, 2005.  ("Sichenzia").  Under the amended terms, Sichenzia agreed to represent
the Company in connection with its continuing reporting requirements, as well as
its  general  corporate  matters,  including,  reviewing  and  drafting  general
corporate  documents.  The  initial  term of the  agreement  is from May 1, 2005
through March 31, 2007.

In consideration for Sichenzia's services,  the Company agreed to a fixed fee of
$50,000 and to issue Sichenzia 500,000 shares of the Company's common stock. The
common stock issued to Sichenzia was valued at approximately $325,000.

On May 18, 2005, the Company  entered into a subscription  agreement with Bodnar
Capital Management,  LLC ("Bodnar Capital"),  pursuant to which the Company sold
Bodnar Capital  2,941,176  shares of the Company's  common stock and warrants to
purchase an  additional  3,000,000  shares of the Company's  common  stock.  The
Company received gross proceeds of approximately $500,000 from the sale of stock
and warrants to Bodnar  Capital.  The warrants are  exercisable  for a period of
five years, are callable,  under certain situations,  upon 30 days prior written
notice, and have exercise prices as follows: (a) 500,000 shares with an exercise
price of $0.25;  (b) 500,000 shares with an exercise price of $0.35; (c) 500,000
shares with an  exercise  price of $0.42;  (d)  500,000  shares with an exercise
price of $0.75;  (e) 500,000 shares with an exercise price of $1.00; (f) 500,000
shares with an exercise price of $1.50. The sale was made in a private placement
exempt from registration requirements pursuant to Section 4(2) of the Securities
Act of 1933, as amended, and Rule 506 promulgated thereunder.


                                       19
<PAGE>

Digicorp
Notes to Financial Statements (continued)

6. WARRANTS

The following table summarizes information about common stock warrants
outstanding at June 30, 2005:

<TABLE>
<CAPTION>
                              Outstanding                                Exercisable
------------------------------------------------------------------------------------------
                                     Weighted
                                      Average
                                     Remaining      Weighted                     Weighted
                                    Contractual      Average                      Average
     Exercise         Number           Life         Exercise        Number       Exercise
      Price         Outstanding       (Years)        Price        Exercisable     Price
----------------    -----------     -----------    ----------   -------------   ---------
<S>                  <C>                <C>          <C>           <C>           <C>
   $ 0.25 -0.42      1,500,000          4.88         $ 0.34        1,500,000     $ 0.34

   $ 0.75 - 1.50     1,500,000          4.88           1.08        1,500,000       1.08
----------------    -----------     -----------    ----------   -------------   ---------
   $ 0.25 - 1.50     3,000,000          4.88         $ 0.71        3,000,000     $ 0.71
================    ===========     ===========    ==========   =============   =========
</TABLE>

7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at June 30, 2005 and 2004 are comprised
of the following:

                                         June 30,              June 30,
                                           2005                  2004
                                      ---------------     --------------
 Professional fees - legal            $        30,000     $           --
 Professional fees - other                     10,000
 Related party liability                       17,295
 Accrued - other                                1,863
                                      ---------------     --------------
                                      $        59,158     $           --
                                      ===============     ==============

8. RELATED PARTY TRANSACTIONS

At June 30,  2005 and 2004,  the  Company  has a  liability  of $17,295  and $0,
respectively,  due to an entity that owned  approximately 20% of the outstanding
shares of the Company's common stock.  The liability is unsecured,  non-interest
bearing and due on demand.

9. SUBSEQUENT EVENTS

On September 19, 2005, the Company entered into an asset purchase agreement with
Philip Gatch, our Chief Technology  Officer,  and thereby completed the purchase
of certain assets from Mr. Gatch  consisting of the iCodemedia suite of websites
and internet properties and all related  intellectual  property (the "iCodemedia
Assets").   The   iCodemedia   suite  of  websites   consists  of  the  websites
www.icodemedia.com,   www.iplaylist.com,   www.tunecast.com,  www.tunebucks.com,
www.podpresskit.com  and  www.tunespromo.com.  We plan to use these  websites to
provide a suite of  applications  and  services  to enable  content  creators to
publish and deliver content to existing and next generation  devices such as the
Apple  iPod  and the  Sony  PSP.  The  iCodemedia  Assets  are  presently  under
development and constitute  nominal assets of the Company.  As consideration for
the iCodemedia Assets, we issued Mr. Gatch 1,000,000 shares of our common stock.
The issuance of shares of common stock to Mr. Gatch was exempt from registration
requirements pursuant to Section 4(2) of the Securities Act of 1933, as amended.

On  July  20,  2005,  as  consideration   for  services,   the  Company  granted
approximately  5,000,000 options,  with an exercise price of $0.25 per share, to
officers,  directors and consultants of the Company.  These stock options become
exercisable  based on a vesting schedule  determined for each specific grant and
expire 10 years from the date of grant.


                                       20
<PAGE>

Item 8.    Changes In and Disagreements With Accountants on Accounting and
           Financial Disclosure.

      Not applicable.

Item 8A.   Controls and Procedures.

      As of the end of the  period  covered  by this  report,  we  conducted  an
evaluation,  under  the  supervision  and with the  participation  of our  chief
executive  officer and chief  financial  officer of our disclosure  controls and
procedures  (as defined in Rule  13a-15(e)  and Rule  15d-15(e)  of the Exchange
Act).  Based  upon  this  evaluation,  our  chief  executive  officer  and chief
financial  officer  concluded  that our  disclosure  controls and procedures are
effective to ensure that all  information  required to be disclosed by us in the
reports that we file or submit under the  Exchange Act is: (1)  accumulated  and
communicated to our management,  including our chief executive officer and chief
financial officer,  as appropriate to allow timely decisions  regarding required
disclosure;  and (2) recorded,  processed,  summarized and reported,  within the
time periods specified in the Commission's  rules and forms. There was no change
in our internal  controls or in other  factors that could affect these  controls
during our last fiscal  quarter that has materially  affected,  or is reasonably
likely to materially affect, our internal control over financial reporting.

Item 8B.   Other Information.

      None.

                                    PART III

Item 9.    Directors, Executive Officers, Promoters and Control Persons;
           Compliance With Section 16(a) of the Exchange Act.

         The following table sets forth the names and ages of the members of our
Board of Directors and our executive officers and the positions held by each.

Name                            Age     Position
----                            ---     --------
Milton "Todd" Ault, III         35      Chief  Executive  Officer  and  Chairman
                                        of the Board of Directors
William B. Horne                37      Chief Financial Officer and Director
Kathryn Macenzie Queen          27      President of Operations
Philip Gatch                    41      Chief Technology Officer
Lynne Silverstein               33      Secretary and Director
Melanie Glazer                  63      Vice Chairman of the Board of Directors
Darrell Grimsley, Jr.           39      Director
Alice Campbell                  55      Director

      Officers are elected  annually by the Board of  Directors  (subject to the
terms of any employment  agreement),  at our annual meeting, to hold such office
until an officer's  successor has been duly appointed and  qualified,  unless an
officer sooner dies, resigns or is removed by the Board.

      Ms.  Silverstein is the daughter of Mrs.  Glazer,  a current  director and
Vice Chairman of our Board of  Directors.  Except for Ms.  Silverstein  and Mrs.
Glazer,  there  are no  family  relationships  between  any  of  our  directors,
executive  officers or persons nominated or charged by us to become directors or
executive officers.

      Below is a brief  description  of the above persons'  business  experience
during the past five years based on information supplied by each of them.


                                       21
<PAGE>

      Milton "Todd" Ault, III, Chief Executive Officer and Chairman of the Board
of Directors. Mr. Ault has been our Chief Executive Officer since April 26, 2005
and has been a director and  Chairman of the Board of  Directors  since July 16,
2005.  From April 26,  2005 until July 20,  2005,  Mr.  Ault also  served in the
capacities of our principal financial officer and principal  accounting officer.
From May 26,  2005  until  July 13,  2005,  Mr.  Ault  served as  interim  Chief
Executive  Officer and as a director of IPEX, Inc., a Nevada  corporation  whose
common stock is quoted on the OTC Bulletin Board (IPEX).  In addition,  Mr. Ault
is  currently  the  Chairman  and Chief  Executive  Officer  of  Patient  Safety
Technologies,  Inc., a Delaware  corporation whose common stock is traded on the
American Stock Exchange ("PST").  Mr. Ault has served as a director of PST since
June 23,  2004.  Since  December  2004,  Mr. Ault has been a manager of Franklin
Capital  Properties,  a wholly owned subsidiary of PST. Since June 30, 2005, Mr.
Ault has  served as  Chairman,  President  and Chief  Executive  Officer of Ault
Glazer  Bodnar  Merchant  Capital,  Inc.,  which is  currently  a  wholly  owned
subsidiary  of PST.  In  addition,  Mr.  Ault  co-founded  Ault Glazer & Company
Investment  Management  LLC  ("Ault  Glazer")  in  1998  and  is  currently  the
controlling and managing member and Chief  Investment  Officer of Ault Glazer, a
private investment  management firm  headquartered in Santa Monica,  California.
From July 1998 until December 2004, Mr. Ault was a registered  representative of
Strome Securities, L.P., a NASD registered broker-dealer.

      William B. Horne, Chief Financial Officer and Director. Mr. Horne has been
our Chief  Financial  Officer and a director since July 20, 2005.  Since July 5,
2005,  Mr.  Horne  has  also  been  Chief  Financial  Officer  of  PST  and  its
subsidiaries.  From May 2002 to April 2005, Mr. Horne held the position of Chief
Financial Officer of Alaska Wireless  Communications,  a privately held advanced
cellular communications company. Since January 2002, Mr. Horne has also provided
strategic  financial  consulting  services to both private and public companies.
From  November  1996 to  December  2001,  Mr.  Horne held the  position of Chief
Financial Officer of The Phoenix Partners, a venture capital limited partnership
located in Seattle, Washington.

      Kathryn  Macenzie Queen,  President of Operations.  Ms. Queen has been our
President of Operations since April 26, 2005. From  approximately  November 2004
until May 2005, Ms. Queen was employed by PST where she advised and assisted the
company's  executive  officers on investment  banking and related matters.  From
2002  until  November  2004,  Ms.  Queen  worked  in  various  positions  in the
entertainment  industry.  Ms. Queen has held  positions at Salomon Smith Barney,
Morgan  Stanley and Mutual of New York.  Ms.  Queen  graduated  in 2002 from the
Fisher  College  of  Business  at the  Ohio  State  University  with  a B.A.  in
Economics, a B.S. in Finance and a B.S. in Accounting.

      Philip  Gatch,  Chief  Technology  Officer.  Mr.  Gatch has been our Chief
Technology  Officer  since June 30, 2005.  On June 30, 2005,  Mr. Gatch was also
appointed  Chief  Technology  Officer of PST.  Since May 12, 2005, Mr. Gatch has
been a 50% owner and  President of Cinapse  Digital  Media,  LLC, a company that
operates a production and post-production  media content facility.  PST owns the
other 50% of Cinapse  Digital Media,  LLC. From September 2003 to June 2005, Mr.
Gatch was Director of Technical  Services of The DR Group. From February 2002 to
April 2003,  Mr. Gatch was Director of Research and  Development  for Media.net.
From 1999 to 2002,  Mr.  Gatch was  Director of  Research  and  Development  for
Digital Entertainment Solutions.

      Lynne  Silverstein,  Secretary and Director.  Ms. Silverstein has been our
Secretary since April 26, 2005 and a member of our Board of Directors since July
20, 2005. Ms. Silverstein is currently the President and Secretary of PST. Since
June 30,  2005,  Ms.  Silverstein  has also served as  Secretary  of Ault Glazer
Bodnar Merchant  Capital,  Inc., which is currently a wholly owned subsidiary of
PST. In  addition,  Ms.  Silverstein  has been Chief  Executive  Officer of Ault
Glazer since October 2003. Prior thereto, she was Director of Operations of Ault
Glazer  since  January  2001,  having  joined Ault  Glazer in January  1999 as a
Manager.

      Melanie  Glazer,  Vice-Chairman.  Mrs.  Glazer  has  been  director  since
December  30, 2004 and Vice  Chairman of the Board of  Directors  since July 16,
2005.  From December 30, 2004 until July 16, 2005,  Mrs.  Glazer was Chairman of
our Board of Directors.  Mrs. Glazer co-founded Ault Glazer in 1998 where she is
a non-managing  member and where she currently serves as an analyst.  Ms. Glazer
is also a manager of Franklin Capital  Properties,  a wholly owned subsidiary of
PST, and has held that position since Franklin Capital Properties'  inception in
December 2004. In 1989, Mrs. Glazer  established her own realty company,  Morris
Glazer Realty,  which she ran successfully until 2003. Mrs. Glazer joined Dobson
& Johnson,  Inc. in 1986,  where she was a real estate  broker until 1990.  Mrs.
Glazer  received  her  Bachelor  of Art degree in  History  in 1964 from  George
Peabody College, part of Vanderbilt University.

      Darrell  Grimsley,  Jr.,  Director.  Mr. Grimsley has been a member of our
Board of Directors  since July 16, 2005.  In addition,  Mr.  Grimsley has been a
practicing attorney during the last five years. From May 1, 1999 to present, Mr.
Grimsley  has been  managing  member  of D.W.  Grimsley,  Jr.,  LLC,  a law firm
practicing in the areas of credit,  toxic torts,  employment  law, due diligence
reporting  and business  consulting  and  advising.  From  October 1, 2003,  Mr.
Grimsley  has been  managing  member  of The  Bankruptcy  Group,  LLC a law firm
focusing on business and consumer bankruptcy law.


                                       22
<PAGE>

      Alice M. Campbell,  Director.  Ms. Campbell has been a member of our Board
of Directors since July 16, 2005.  Since October 22, 2004, Ms. Campbell has been
a director of PST.  Since 2001,  Ms.  Campbell has been,  and is  currently,  an
investigator and consultant,  specializing in research and litigation  services,
financial  investigations  and computer  forensics,  for major companies and law
firms  throughout  the  United  States.   Ms.  Campbell  is  a  certified  fraud
specialist,  as well as a certified  instructor for the Regional Training Center
of the United  States  Internal  Revenue  Service and for the National  Business
Institute.  From 1979 to 2001,  Ms.  Campbell  served as a special agent for the
United States Treasury  Department where she conducted  criminal  investigations
and worked  closely with the United  States  Attorney's  Office and with several
federal  agencies,  including the Internal  Revenue  Service,  Federal Bureau of
Investigation,   Secret  Service,   Customs  Service,  State  Department,   Drug
Enforcement  Agency,  Bureau of Alcohol,  Tobacco and Firearms  and U.S.  Postal
Service.

Audit Committee

      The Audit  Committee is appointed by the Board of Directors in  fulfilling
its  responsibilities to oversee:  (1) the integrity of our financial statements
and  disclosure  controls;  (2)  the  qualifications  and  independence  of  our
independent accountants; (3) the performance of our independent accountants; and
(4)  compliance  with legal and regulatory  requirements.  Alice M. Campbell and
Melanie Glazer are the members of our Audit  Committee.  The Audit  Committee is
chaired by Ms. Campbell.

Compensation Committee

      The  Compensation  Committee  is  appointed  by the Board of  Directors to
discharge the  responsibilities  of the Board  relating to  compensation  of our
executive  officers.  Alice M.  Campbell  is  currently  the only  member of our
Compensation Committee and she is Chairman of the Compensation Committee.

Code of Ethics

      We have adopted a Code of Ethics and Business  Conduct that applies to our
Chief Executive Officer and Chief Financial  Officer,  which is filed as Exhibit
14.1 to this annual report.  Upon request, we will provide to any person without
charge a copy of our Code of Ethics.  Any such  request  should be made to Attn:
Jeanne Olsky,  Digicorp,  100 Wilshire  Boulevard,  Suite 1750, Santa Monica, CA
90401.  Our telephone  number is (310) 751-1477.  We do not maintain a corporate
website.

Section 16(a) Beneficial Ownership Compliance

      Section  16(a)  of the  Securities  Exchange  Act  of  1934  requires  our
directors and executive  officers and persons who beneficially own more than ten
percent  of a  registered  class of our equity  securities  to file with the SEC
initial  reports of ownership and reports of change in ownership of common stock
and other equity securities of our Company. Officers, directors and greater than
ten percent  stockholders  are  required by SEC  regulations  to furnish us with
copies of all Section  16(a) forms they file.  To our  knowledge,  the following
persons have failed to file, on a timely basis, the identified  reports required
by Section 16(a) of the Exchange Act during the most recent fiscal year:

<TABLE>
<CAPTION>
                                                 Number              Transactions not   Known failures to
Name and Relationship                            of late reports     timely reported    file a required form
---------------------                            ----------------    ---------------    --------------------
<S>                                                       <C>                 <C>                <C>
Patient Safety Technologies, Inc., 10% Owner              1                   1                  0
Melanie Glazer, Director                                  1                   1                  0
Don J. Colton, Former Officer, Former Director
     and Former 10% Owner                                 1                   3                  1
Gregg B. Colton, Former Officer, Former
     Director and Former 10% Owner                        1                   2                  1
Pioneer Oil and Gas, affiliate of Former
     Director                                             1                   1                  1
</TABLE>


                                       23
<PAGE>

Item 10.   Executive Compensation.

      The  following  table sets  forth  information  concerning  the annual and
long-term  compensation  of our Chief  Executive  Officer  and the  other  named
executive  officers,  for  services as  executive  officers for the fiscal years
ended June 30, 2005, June 30, 2004 and June 30, 2003.

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE
                                                                                                Long-Term
                                                                                              Compensation
                                                                               -------------------------------------------
                                                 Annual Compensation                      Awards                Payouts
                                         ------------------------------------- ------------------------------ ------------
                                                                                                                              All
                                                                     Other                    Securities                     Other
                                                                    Annual     Restricted     Under-lying                   Compen-
          Name and                                                  Compen-    Stock           Options/           LTIP      sation
     Principal Position          Year     Salary ($)   Bonus ($)  sation ($)   Award(s) ($)    SARs (#)       Payouts ($)      ($)
------------------------------ --------- ------------- ---------- ------------ --------------- -------------- ------------- --------
<S>                             <C>          <C>          <C>        <C>            <C>            <C>            <C>          <C>
Milton "Todd" Ault, III         2005         0            0          0              0              0              0            0
     CEO and Chairman (1)       2004         0            0          0              0              0              0            0
                                2003         0            0          0              0              0              0            0
</TABLE>

(1)   Mr. Ault was appointed Chief  Executive  Officer on April 26, 2005 and has
      been a director  and  Chairman  of the Board of  Directors  since July 16,
      2005.

Compensation of Executive Officers

      The following is a description of all compensation the Company has paid to
its executive officers as of September 21, 2005.

      On July 20,  2005,  as  consideration  for service as our Chief  Executive
Officer, we granted Milton "Todd" Ault, III options to purchase 2,000,000 shares
of our common  stock with an  exercise  price of $0.25 per  share.  These  stock
options will vest  quarterly over two years,  with the first 250,000  options to
vest September 30, 2005.

      On July 20,  2005,  as  consideration  for service as our Chief  Financial
Officer,  we granted William B. Horne options to purchase  250,000 shares of our
common stock with an exercise price of $0.25 per share. These stock options will
vest quarterly  over two years,  with the first 31,250 options to vest September
30, 2005.

      On July 20,  2005,  as  consideration  for  service  as our  President  of
Operations,  we granted Kathryn Queen options to purchase  750,000 shares of our
common stock with an exercise price of $0.25 per share. These stock options will
vest quarterly  over two years,  with the first 93,750 options to vest September
30, 2005. Also on July 20, 2005, as an incentive  bonus,  subject to the earlier
to occur of us obtaining a market  capitalization of $25 million at December 31,
2006,  or  prior to  December  31,  2006,  if we  obtain,  and  maintain  for 21
consecutive days, a market capitalization of $25 million, we agreed to grant Ms.
Queen  options to  purchase  750,000  shares of our common  stock.  These  stock
options will vest quarterly over four years from the date of grant.

      On July 20, 2005,  as  consideration  for service as our Chief  Technology
Officer,  we granted  Philip  Gatch  options to purchase  250,000  shares of our
common stock with an exercise price of $0.25 per share. These stock options will
vest in equal  amounts  on July 20,  2005,  2006 & 2007,  with the first  83,333
options  to vest  July 20,  2005.  Also on July 20,  2005,  we  agreed  to issue
restricted  stock valued at $12,500  quarterly during the three-year term of his
employment as Chief Technology Officer.

      On July 20, 2005, as  consideration  for service as Secretary,  we granted
Ms.  Silverstein  options to purchase 150,000 shares of our common stock with an
exercise price of $0.25 per share.  These stock options will vest quarterly over
two years, with the first 18,750 options to vest September 30, 2005.


                                       24
<PAGE>

Employment Agreements

      Philip Gatch, our Chief Technology  Officer, is our only executive officer
with an  employment  agreement.

On September 20, 2005, we entered into an  employment  agreement  with Mr. Gatch
documenting  the terms of his employment as our Chief  Technology  Officer.  The
term of the  employment  continues  for 36 months  from  September  20, 2005 and
automatically  renews for successive one-year terms unless either party delivers
to the other party written notice of termination at least 30 days before the end
of the then current term. Mr. Gatch's base  compensation  under the agreement is
$95,000 in cash per year and  $45,000 in a  restricted  stock  grants each year.
Prior to  signing  the  employment  agreement,  we  granted  Mr.  Gatch  options
entitling him to purchase  250,000 shares of common stock vesting  annually over
three  years with a strike  price of $0.25 per share,  which  stock  options are
reflected in the employment agreement.  Mr. Gatch is also eligible to receive an
annual performance bonus determined by our chief executive officer. In addition,
Mr.  Gatch was  granted  rights  for three  years to (a) veto a chief  executive
officer  candidate as a replacement  to Milton "Todd" Ault,  III, and (b) veto a
decision to sell our company or any of our core assets or  technologies  related
to the iCodemedia Assets in the event we sell for less than $50,000,000.  If Mr.
Gatch's  employment  is  terminated  for any  reason,  the veto  rights  will be
forfeited.  The agreement also contains  customary  provisions  for  disability,
death,  confidentiality,  indemnification  and  non-competition.  If  Mr.  Gatch
voluntarily terminates the agreement or if we terminate the agreement for cause,
Mr. Gatch will not be entitled to any  compensation  for the period  between the
effective  termination  date and the end of the employment term and all unvested
restricted  stock  and  stock  options  will  be  forfeited.  If we  voluntarily
terminate the agreement without cause, we must pay Mr. Gatch a cash sum equal to
(a) all accrued  base salary  through the date of  termination  plus all accrued
vacation  pay and cash  bonuses,  if any,  plus (b) as  severance  compensation,
500,000 unrestricted shares of common stock and $250,000 cash. In the event of a
merger,  consolidation,  sale, or change of control,  the surviving or resulting
company is required to honor the terms of the agreement with Mr. Gatch.

Compensation of Directors

      On July 20, 2005, as consideration  for service on our Board of Directors,
we granted to each of Melanie Glazer, Alice M. Campbell, Darrell Grimsley, Lynne
Silverstein  and  William B. Horne  options to  purchase  250,000  shares of our
common stock with an exercise price of $0.25 per share. These stock options will
vest  quarterly  over two years,  with the first 31,250 options of each grant to
vest September 30, 2005.

      On July 20, 2005,  as  consideration  for service as Chairman of our Audit
Committee,  we granted Ms.  Campbell  options to purchase  100,000 shares of our
common stock with an exercise price of $0.25 per share. These stock options will
vest quarterly  over two years,  with the first 12,500 options to vest September
30, 2005.

      On July 20, 2005,  as  consideration  for service as a member of our Audit
Committee, we granted Ms. Glazer options to purchase 50,000 shares of our common
stock with an exercise  price of $0.25 per share.  These stock options will vest
quarterly  over two years,  with the first 6,250  options to vest  September 30,
2005.

Item 11.   Security Ownership of Certain Beneficial Owners and Management and
           Related Stockholder Matters.

      The following  table sets forth certain  information,  as of September 21,
2005 with respect to the beneficial  ownership of the  outstanding  common stock
by: (i) any beneficial  holder of more than five (5%) percent of our outstanding
common stock; (ii) each of the named executive officers and directors; and (iii)
the named  executive  officers  and  directors  as a group.  Except as otherwise
indicated,  each of the stockholders listed below has sole voting and investment
power over the shares beneficially owned.

<TABLE>
<CAPTION>
                                                      Common Stock             Percentage of
Name of Beneficial Owner (1)                     Beneficially Owned (2)      Common Stock (2)
---------------------------------------------------------------------------------------------
<S>                                                   <C>                           <C>
Milton "Todd" Ault, III                               3,554,527 (3)                 24.6%
William B. Horne                                         62,500 (4)                     *
Lynne Silverstein                                        50,000 (5)                     *
Melanie Glazer                                          148,000 (6)                  1.0%
Darrell Grimsley, Jr.                                    31,250 (7)                     *
Alice Campbell                                           43,750 (8)                     *
Patient Safety Technologies, Inc.                     2,792,027                     19.7%
Bodnar Capital Management, LLC                        5,941,176 (9)                 34.6%
---------------------------------------------------------------------------------------------
All officers,  directors and directors nominees       3,779,527                     25.8%
as a group (6 persons)
</TABLE>


                                       25
<PAGE>

-----------------------------
* Less than 1%

      (1)   Except as otherwise indicated,  the address of each beneficial owner
            is c/o Digicorp,  100 Wilshire Boulevard,  Suite 1750, Santa Monica,
            CA 90401.
      (2)   Applicable  percentage  ownership is based on  14,184,033  shares of
            common stock  outstanding  as of September  21, 2005,  together with
            securities  exercisable or  convertible  into shares of common stock
            within  60  days  of  September  21,  2005  for  each   stockholder.
            Beneficial  ownership is determined in accordance  with the rules of
            the Securities and Exchange Commission and generally includes voting
            or  investment  power with respect to  securities.  Shares of common
            stock that a person has the right to acquire beneficial ownership of
            upon the  exercise  or  conversion  of options,  convertible  stock,
            warrants  or other  securities  that are  currently  exercisable  or
            convertible or that will become exercisable or convertible within 60
            days of September  21, 2005 are deemed to be  beneficially  owned by
            the person holding such  securities for the purpose of computing the
            percentage  of  ownership  of such  person,  but are not  treated as
            outstanding for the purpose of computing the percentage ownership of
            any other person.
      (3)   Includes: (a) 250,000 shares issuable upon exercise of stock options
            which vest  September 30, 2005,  have an exercise price of $0.25 per
            share and expire  July 20,  2015;  (b) 512,500  shares  beneficially
            owned by certain private  investment  funds and individual  accounts
            managed by Ault  Glazer & Company  Investment  Management  LLC,  for
            which Mr.  Ault  serves as Chief  Investment  Officer  and  managing
            member; and (c) 2,792,027 shares of the common stock held by Patient
            Safety Technologies, Inc., for which Mr. Ault serves as Chairman and
            Chief Executive Officer.
      (4)   Represents shares issuable upon exercise of stock options which vest
            September  30, 2005,  have an exercise  price of $0.25 per share and
            expire July 20, 2015.
      (5)   Represents shares issuable upon exercise of stock options which vest
            September  30, 2005,  have an exercise  price of $0.25 per share and
            expire July 20, 2015.
      (6)   Includes:  (a) 110,500 shares of common stock; and (b) 37,500 shares
            issuable upon  exercise of stock  options  which vest  September 30,
            2005,  have an exercise price of $0.25 per share and expire July 20,
            2015.
      (7)   Represents shares issuable upon exercise of stock options which vest
            September  30, 2005,  have an exercise  price of $0.25 per share and
            expire July 20, 2015.
      (8)   Represents shares issuable upon exercise of stock options which vest
            September  30, 2005,  have an exercise  price of $0.25 per share and
            expire July 20, 2015.
      (9)   Includes: (a) callable warrants to purchase 500,000 shares of common
            stock with an exercise  price of $0.25  exercisable  for a period of
            five years;  (b)  callable  warrants to purchase  500,000  shares of
            common  stock  with an  exercise  price of $0.35  exercisable  for a
            period of five years;  (c)  callable  warrants  to purchase  500,000
            shares of common stock with an exercise  price of $0.42  exercisable
            for a period  of five  years;  (d)  callable  warrants  to  purchase
            500,000  shares  of common  stock  with an  exercise  price of $0.75
            exercisable  for a period of five years;  (e)  callable  warrants to
            purchase  500,000  shares of common stock with an exercise  price of
            $1.00  exercisable  for a period  of five  years;  and (f)  callable
            warrants to purchase 500,000 shares of common stock with an exercise
            price of $1.50  exercisable  for a period of five  years.  Steven J.
            Bodnar is a managing member of and may be deemed a control person of
            Bodnar Capital Management, LLC.

      No  Director,  executive  officer,  affiliate  or any  owner of  record or
beneficial  owner of more than 5% of any  class of our  voting  securities  is a
party adverse to our business or has a material interest adverse to us.

Securities Authorized for Issuance Under Equity Compensation Plans

      The  following  table  shows  information  with  respect  to  each  equity
compensation  plan under which our common stock is authorized for issuance as of
the fiscal year ended June 30, 2005.


                                       26
<PAGE>

<TABLE>
<CAPTION>
                      EQUITY COMPENSATION PLAN INFORMATION
------------------------------------------------------------------------------------------------------------
Plan category                       Number of securities    Weighted average       Number of securities
                                    to be issued upon       exercise price of      remaining available for
                                    exercise of             outstanding options,   future issuance under
                                    outstanding options,    warrants and rights    equity compensation plans
                                    warrants and rights                            (excluding securities
                                                                                   reflected in column (a)
------------------------------------------------------------------------------------------------------------
                                            (a)                    (b)                      (c)
------------------------------------------------------------------------------------------------------------
<S>                                         <C>                    <C>                      <C>
Equity compensation plans
approved by security holders                -0-                    -0-                      -0-
------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------
Equity compensation plans
not approved by security
holders                                     -0-                    -0-                      -0-
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Total                                       -0-                    -0-                      -0-
------------------------------------------------------------------------------------------------------------
</TABLE>

Item 12.   Certain Relationships and Related Transactions.

      Management  believes that all of the below  transactions  were on terms at
least as favorable as could have been obtained from unrelated third parties.

Change in Control

      On December 29, 2004, our then current  directors along with several other
shareholders  sold 2,229,527 shares of our common stock,  representing  22.3% of
our  outstanding  shares  of  common  stock  on such  date,  to  Patient  Safety
Technologies,   Inc.  (formerly,   Franklin  Capital  Corporation  ("PST").  Our
directors,  Gregg B. Colton, Don J. Colton,  Norman Sammis and Glenn W. Stewart,
sold 80% of their  holdings  of our  common  stock  to PST at $.135  per  share.
Another shareholder who was not a principal  shareholder or director sold all of
his shares to PST at $.145 per share.  The aggregate amount of funds of PST used
to purchase the shares of common stock was  approximately  $301,998.  The source
for such funds was PST's working capital.  The directors and shareholders agreed
to sell an  additional  1,224,000  shares of our common stock of to PST upon the
shares  being  registered  with  the  Securities  and  Exchange  Commission.  In
addition,  prior to the  acquisition  and change of control,  PST owned  327,500
shares of our common stock.

      Pursuant to the stock  purchase  agreement  with PST,  Melanie  Glazer was
appointed as Chairman of our Board of Directors on December 30, 2004,  following
the  resignation  of  Glenn W.  Stewart,  Norman  Sammis  and Don J.  Colton  as
directors. Effective April 26, 2005, Gregg B. Colton resigned from his positions
as President,  Chief Executive Officer and Chief Financial Officer. On April 26,
2005,  our Board of Directors  appointed the following  officers:  (a) Milton C.
Ault, III - Chief Executive  Officer;  (b) Kathryn Macenzie Queen - President of
Operations; and (c) Lynne Silverstein - Secretary.

      On June 30,  2005,  we  appointed  Philip  Gatch as our  Chief  Technology
Officer.

      Effective July 16, 2005,  Gregg B. Colton  resigned from his position as a
director.

      Effective  July 16, 2005, we appointed  Alice M.  Campbell,  Milton "Todd"
Ault, III and Darrell Grimsley as directors. Upon his appointment,  Mr. Ault was
named  Chairman of our Board of Directors.  Ms.  Campbell was appointed to chair
our Audit Committee and to chair our Compensation Committee.

      Effective  July 20, 2005, we appointed  Lynne  Silverstein  and William B.
Horne as directors.  Neither Ms.  Silverstein nor Mr. Horne have been named to a
committee of the Board of Directors.

      Effective  July 20,  2005,  we  appointed  William  B.  Horne as our Chief
Financial Officer.

      As described under Item 9 above, all of our current officers and directors
had and/or  currently  have  employment  positions,  directorships  and/or other
relationships  with Ault Glazer & Company  Investment  Management  LLC,  Patient
Safety Technologies,  Inc. and/or Ault Glazer & Company Investment  Management's
or Patient Safety Technologies' current officers and directors.


                                       27
<PAGE>

Acquisition of iCodemedia Assets

      On September 19, 2005, we entered into an asset  purchase  agreement  with
Philip Gatch, our Chief Technology  Officer,  and thereby completed the purchase
of certain assets from Mr. Gatch  consisting of the iCodemedia suite of websites
and internet properties and all related  intellectual  property (the "iCodemedia
Assets").   The   iCodemedia   suite  of  websites   consists  of  the  websites
www.icodemedia.com,   www.iplaylist.com,   www.tunecast.com,  www.tunebucks.com,
www.podpresskit.com  and  www.tunespromo.com.  We plan to use these  websites to
provide a suite of  applications  and  services  to enable  content  creators to
publish and deliver content to existing and next generation  devices such as the
Apple  iPod  and the  Sony  PSP.  The  iCodemedia  Assets  are  presently  under
development and constitute  nominal assets.  As consideration for the iCodemedia
Assets, we issued Mr. Gatch 1,000,000 shares of common stock.

Item 13.   Exhibits.

Exhibit
Number                                Description
-----------     ----------------------------------------------------------------
3.1             Bylaws (Incorporated by reference to the Company's  registration
                statement  on Form  10-SB  (File No.  000-33067)  filed with the
                Securities and Exchange Commission on August 9, 2001)
3.2             Amendment  No. 1 to Bylaws  (Incorporated  by  reference  to the
                Company's  Form 8-K  filed  with  the  Securities  and  Exchange
                Commission on July 21, 2005)
4.1             Form of $0.25 Warrant issued to Bodnar Capital  Management,  LLC
                (Incorporated  by reference to the Company's Form 8-K filed with
                the Securities and Exchange Commission on May 24, 2005)
4.2             Form of $0.35 Warrant issued to Bodnar Capital  Management,  LLC
                (Incorporated  by reference to the Company's Form 8-K filed with
                the Securities and Exchange Commission on May 24, 2005)
4.3             Form of $0.42 Warrant issued to Bodnar Capital  Management,  LLC
                (Incorporated  by reference to the Company's Form 8-K filed with
                the Securities and Exchange Commission on May 24, 2005)
4.4             Form of $0.75 Warrant issued to Bodnar Capital  Management,  LLC
                (Incorporated  by reference to the Company's Form 8-K filed with
                the Securities and Exchange Commission on May 24, 2005)
4.5             Form of $1.00 Warrant issued to Bodnar Capital  Management,  LLC
                (Incorporated  by reference to the Company's Form 8-K filed with
                the Securities and Exchange Commission on May 24, 2005)
4.6             Form of $1.50 Warrant issued to Bodnar Capital  Management,  LLC
                (Incorporated  by reference to the Company's Form 8-K filed with
                the Securities and Exchange Commission on May 24, 2005)
10.1            Subscription  Agreement dated May 18, 2005 between  Digicorp and
                Bodnar Capital Management, LLC (Incorporated by reference to the
                Company's  Form 8-K  filed  with  the  Securities  and  Exchange
                Commission on May 24, 2005)
10.2            Asset  Purchase   Agreement  dated  September  19,  2005,  among
                Digicorp  and Philip  Gatch  (Incorporated  by  reference to the
                Company's  Form 8-K  filed  with  the  Securities  and  Exchange
                Commission on September 22, 2005)
10.3            Employment  Agreement dated  September 20, 2005,  among Digicorp
                and Philip Gatch  (Incorporated  by  reference to the  Company's
                Form 8-K filed with the  Securities  and Exchange  Commission on
                September 22, 2005)
14.1            Code of Ethics
31.1            Certification  by  Chief  Executive  Officer,  required  by Rule
                13a-14(a) or Rule 15d-14(a) of the Exchange Act
31.2            Certification  by  Chief  Financial  Officer,  required  by Rule
                13a-14(a) or Rule 15d-14(a) of the Exchange Act
32.1            Certification  by  Chief  Executive  Officer,  required  by Rule
                13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350
                of Chapter 63 of Title 18 of the United States Code
32.2            Certification  by  Chief  Financial  Officer,  required  by Rule
                13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350
                of Chapter 63 of Title 18 of the United States Code


                                       28
<PAGE>

Item 14.   Principal Accountant Fees and Services.

Audit Fees

      The  aggregate  fees  billed for  professional  services  rendered  by our
principal accountants for the audit of our financial statements, for the reviews
of the financial  statements  included in our annual report on Form 10-KSB,  and
for other services  normally  provided in connection with statutory filings were
$9,150  and  $2,225  for the  years  ended  June 30,  2005  and  June 30,  2004,
respectively.

All Other Fees

      We did not incur any fees for other professional  services rendered by our
principal accountants during the years ended June 30, 2005 and June 30, 2004.

Audit Committee Pre-Approval Policies and Procedures

      Our Audit Committee was recently formed.  The fees for audit services were
approved by our board of directors  and the full board  approved  the  financial
statements  filed  on  Forms  10-QSB  and  10-KSB.  Management  is  required  to
periodically  report to the Audit  Committee  regarding  the extent of  services
provided by the independent auditor.


                                       29
<PAGE>

                                   SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                               DIGICORP


         Date: September 28, 2005         By:  /s/ Milton "Todd" Ault, III
                                               --------------------------------
                                               Milton "Todd" Ault, III
                                               Chief Executive Officer


         Date: September 28, 2005         By:  /s/ William B. Horne
                                               --------------------------------
                                               William B. Horne
                                               Chief Financial Officer and
                                               Principal Accounting Officer

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

<TABLE>
<CAPTION>
           Signature                        Title                   Date
---------------------------------     -----------------------     --------------------
<S>                                    <C>                          <C>
/s/ Milton "Todd" Ault, III            Chairman of the Board        September 28, 2005
-------------------------------
Milton "Todd" Ault, III

/s/ William B. Horne                                Director        September 28, 2005
-------------------------------
William B. Horne

/s/ Lynne Silverstein                               Director        September 28, 2005
-------------------------------
Lynne Silverstein

/s/ Melanie Glazer                                  Director        September 28, 2005
-------------------------------
Melanie Glazer

/s/ Darrell Grimsley, Jr.                           Director        September 28, 2005
-------------------------------
Darrell Grimsley, Jr.

/s/ Alice Campbell                                  Director        September 28, 2005
-------------------------------
Alice Campbell
</TABLE>


                                       30